OUR TAKE

Home, Fuzzy Home

	Format for printing Reuse/Reprint
	Discussion Boards The Motley Fool Take Building/Maintaining a Home

By Dayana Yochim (TMF School)
July 2, 2002

The seven-month-old Muenster in the fridge isn't the only thing in the house turning green. According to the Insurance Information Institute (www.iii.org), mold claims are coming out of the woodwork  -- literally. It's one of the major factors behind the rising costs of home insurance, which is expected to increase 8% this year.

Fuzzy, flaky, smelly, icky mold -- virtually a non-issue a few years ago -- cost insurers more than $1 billion last year. That's more than five times the payouts made in 2000. In Texas, for example, mold claims increased 1,300% between the first quarter of 2000 and the fourth quarter of 2001, costing insurers more than $850 million.

Rising home repair costs and Armageddon-like catastrophes have also played a part in rising insurance costs. According to the Insurance Information Institute, home insurers over the past decade paid out $1.18 in losses and expenses for every $1 they earned in premiums. In 2001 alone, they paid out $8.9 billion more in losses and expenses than they received in premiums, the second worst year on record (1992, the year of Hurricane Andrew, produced losses of $11.5 billion).

Though the rising costs of insuring your home translates to just $40 a year for the average policyholder, it pays to keep a lid on such fixed costs. Here are a few money-saving tips:

• Don't build expensive home in disaster-prone areas like coastal Florida and earthquake-prone California.
• Ask about discounts for installing disaster-proof features for your roofing, plumbing, and electrical systems.
• Take advantage of discounts. If you're a good driver, good student, loyal customer, a member of a certain trade group, and generally have good karma, you may be eligible for significant discounts.
• Compare the cost of insuring your car and home with the same company.
• Install smoke detectors and a security device in your home.
• Raise your deductible. It could save you from 15% to 30% on your premium.
• Keep your credit record clean.
• Consider living in a yurt.

For tips on everything from installing ceiling fans to scraping mold from your baseboards, head to the Building/Maintaining a Home discussion board on Fool.com.

The Motley Fool is investors writing for investors. To view a writer's current stock holdings, check out his or her online personal profile.